Edible Garden AG Inc. is expanding its reach following the acquisition of a greenhouse facility in the Midwest.
Located in Grand Rapids, Mich., Edible Garden Heartland is a 5-acre controlled environment agriculture (CEA) facility. According to the Belvidere-based company, the site is expected to be fully operational by the end of the year, with capacity to support up to $20 million in annualized revenue.
“It’s really pretty exciting. I love the idea of … bridging the two parts of the country and being that kind of bridge,” CEO Jim Kras told NJBIZ.
The deal also includes an existing horticultural business that Edible Garden says has historically generated about $2 million in annual revenue. The combination offers potential cross-selling opportunities.
“We’re going to continue that business. We kept their employees and we’re going to add to it,” Kras said. “So we’ll be bringing more jobs to the area as we’re going to be bringing technology and starting to put in some other products that we grow and are known for to provide more service for [customers].”
The location is ideal because it places Edible Garden in proximity to grocer Meijer, a major distribution partner. That proximity allows for efficiencies that minimize food miles and shorten time to market, which is good for consumers but also good for business – and the environment – because it decreases spoilage and waste on top of reducing the company’s carbon footprint.
In New Jersey, Edible Garden CEO Jim Kras called attention to its oldest customer, Wakefern Food Corp., and the efforts the company has made in supporting the company, and its mission.
“They actually send their big yellow ShopRite trucks to our Belvidere, New Jersey, facility six out of seven days a week to pick up, which is huge for us,” Kras told NJBIZ. “It allowed us to remove nine vans and two box trucks driving off throughout New Jersey.” Aside from logistical support, Kras pointed to the sustainable benefits that kind of move makes. “Think about the reduction in carbon that’s resulted in and, you know, they’ve got good, fresh product that’s moving through their warehouse … that was a huge commitment on both parties part, but primarily Wakefern’s to do it. And it was the right thing. And I’m trying to get all my retailers to think that way. … Let’s try to maximize the trucks that are already out there versus just putting more trucks on, you know?”
Edible Garden Heartland won’t just help bring the company’s “Simply Local…Simply Fresh” foods to the area, it’ll also be retrofitted to accommodate a state-of-the-art research and development center with a focus on improving existing products and developing new ones, innovating plant-based protein and nutraceuticals, and applying advanced agricultural technologies.
The site will also mark Edible Garden’s first commercial installation of its proprietary hybrid growing system.
In Belvidere, the company also occupies a 5-acre facility. However, Kras pointed out that on the East Coast processes are more horizontal. In the Midwest, Edible Gardens will start to grow vertically, which takes up less space overall.
“We are elevating and optimizing that core technology to include now more vertical grows,” he said. “Which means we can double our output from the same amount of space out of Michigan, which means we can potentially double our revenue out of that facility.”
And because the Grand Rapids location is essentially turnkey, Kras said it allows Edible Garden to do even more, quicker since it doesn’t have to build out the entire space.
Edible Garden launched its IPO on the Nasdaq in May.
Earlier this month, the company reported financial results for the three-month period ending June 30. Revenues totaled $3 million, marking an increase of 7.5% compared with the same period last year. The company attributed the increase to growth from its existing customer base.
“While we are happy with the organic growth we continue to witness in our business, we believe we are now well positioned to drive more rapid expansion of our business and increase our margins beginning in the second half of 2022,” Kras said in a statement released with the results.
For the first six months of 2022, revenues came in at $5.7 million – an increase of 8.8% for the first half of 2021.
The new facility will be led by General Manager Mike Sudbury, a “heartland native.” The company anticipates retaining most of the existing workforce at the property from the formerly family-owned business, with the potential to add more positions in the future.
“We’re keeping their employees and the son is going to stay on over the next year and help us transition some of the business,” Kras said, noting the sensitivity that comes with taking over the business. “I respect anybody who puts in the hard work and builds a business. And it’s really hard. And so, I think they’re excited and now they can go do what they want to do … and everybody wins.”
Further extending its community outreach – a guiding principal of the company – Edible Garden said it is partnering with the University of Michigan’s School of Environment & Sustainability and Erb Institute to offer students the chance to work directly on development and implementation programs to address the environmental and societal impacts of the food industry by using sustainable CEA farming practices at the midwestern location.
Financial terms of the acquisition were not disclosed.